Somebody screwed up in estimating ATC privatization costs

Jazz ShawPosted at 9:21 am on August 17, 2017

So will Bill Shuster’s air traffic control (ATC) privatization plan get a vote when Congress gets back to work for the fall session? If it does, they’d better be sure to find somebody who can do basic math first and take a fresh look at the numbers. We already saw a decided lack of enthusiasm (if not outright opposition) from some members of the GOP, but now the Democrats are getting in on the act. Several of them have been reviewing the cost estimates for the plan and it’s looking as if this scheme would wind up costing significantly more than we were originally told. (AIN Online)

Democratic leaders in the U.S. are asking the Congressional Budget Office (CBO) to take a fresh look at the costs associated with the House FAA reauthorization package. They say changes to the bill and taxes associated with the air traffic control privatization proposal would increase the deficit by billions more than original estimates.

The leaders, including the ranking Democrats of four House committees, noted the CBO estimated that the ATC proposal in the 21st Century AIRR Act, H.R.2997, would increase net deficits by more than $20 billion over the next 10 years and by more than $5 billion in subsequent 10-year periods.

But since that estimate, “significant changes” have been made to the bill, including the addition of a tax proposal associated with the measure that would separate ATC from the FAA. The proposal “slashes revenues from aviation excise taxes by more than $15 billion per year.” Other changes of the bill include $1 billion in cuts to airport grants, an additional $945 million.

I’ll just say upfront that it’s refreshing to see the Democrats actually taking an interest in how much government proposals cost and being concerned about the deficit. (Though I’m sure the fact that President Trump has endorsed this dubious measure has made them noticeably more eager to find a reason to oppose it.) It’s particularly interesting to see any of them potentially opposing any measure which would hand so much power to unions. But no matter the underlying reason, the question being brought up is a valid one.

Keep in mind that this is, at the heart of it, ostensibly a privatization measure. While the system could clearly use some technological upgrades, all privatization plans are supposed to take advantage of the competition and efficiencies of the private sector to reduce costs to the taxpayers. Even if the original numbers had been correct, this plan would have been driving us tens of billions of dollars further in the hole. But now that more changes to the plan have been introduced to appease some opponents, those projections have changed. There could be another 15 to 20 billion added to the deficit in the first decade in addition to the losses the original plan projected.

Never mind that fact that this scheme would hand far too much power to the few remaining major airlines and their unions while likely driving up costs for consumers. The bottom line for this deal simply doesn’t work out. This plan doesn’t need a vote or even a revamp. It should be scrapped and proponents should be given the time to come up with a new proposal which delivers technical upgrades while instituting real privatization and savings.